Small potatoes, big markets in China's Inner Mongolia

Separated by 600 miles of mountain roads and part of the Great Wall of China, much stands between the buzzing supermarkets of 21st century Beijing and Wuchuan County, Inner Mongolia, with its patchwork of family-owned potato plots. In China, as in other rapidly developing countries, seemingly impossible differences in scale, power, and culture have opened up between rural farming and urban marketing. As large supermarkets belonging to even larger national and international chains have come to sell much of the food consumed in cities, much of the produce is still grown by smallholder farmers cultivating tiny plots of land in remote regions. Here in Inner Mongolia, at least, the farmers have found new cooperative solutions to accessing Beijing's supermarket shelves on a more equal footing.

Potato country

The farmers of Wuchuan County, in the Inner Mongolia Autonomous Region forming the border of north-west China, began growing potatoes early in the 20th century and found that their cold, highland valleys produced a crop of exceptional quality. The era of farm collectivisation came and went, and the farmers returned to cultivating small land holdings, often less than a hectare, while selling to regional traders at markets or on the roadside. Starting in the 1990s, these local buyers became the beginning of a long chain of middlemen, which might carry the harvest to the booming capital city of Beijing. Here the first modern supermarket opened in 1994, and by 2008 - with more than half a million chain supermarkets operating nationwide - the businesses were selling some 90 per cent of agricultural food products in the capital.

With help from the SFAGM project, the new cooperative has instituted more precise hand-sorting for quality controlDr. Hu Dinghuan

While some products of Inner Mongolia's highlands found their way into Beijing shopping carts, it was the middlemen rather than the farmers who reaped the benefits of urban affluence. The supply chains needed shortening. In 2003, motivated by the country's recent accession to the WTO, the Chinese and Canadian governments initiated the Small Farmers Adapting to Global Markets (SFAGM) project in China's western provinces. Wuchuan County was selected as a pilot region, and a research team began surveying both the county and Beijing's supermarkets to gauge the potential for new links.

Crossing the mountains

One early entrepreneur, Ms. Wu Qiong, travelled with the survey group who visited Beijing. Afterwards in 2005, she signed an agreement with Wu-Mart Supermarket to supply potatoes from her home region. She put her personal finances into two tons of her neighbours' potatoes and a truck to transport them over the Yinshan Mountains. She and the driver had to unload the truck themselves at the distribution centre in the city, but even with this do-it-yourself approach, Wu Qiong could not recoup the cost of transport. She decided not to continue this one-woman trade.

Finally, cooperation and organisation enabled farmers to deal with supermarkets collectively rather than as individuals. With help from the SFAGM project the new cooperative instituted more precise hand-sorting for quality control, designed packaging printed with the Chuanbao brand (meaning 'Wuchuan's treasure'), and forged contracts to send larger shipments to Beijing buyers. The recognisable brand began to make a name for Wuchuan potatoes.

New customers

Cooperation and organisation has enabled farmers to deal with supermarkets collectively, rather than as individualsDr. Hu Dinghuan

While the SFAGM researchers experimented with many approaches to increase the marketability of the region's potatoes - good agricultural practices, improved extension methods, on-farm quality and food safety assurance - there has, interestingly, been little need for change in farming methods or in the potatoes themselves. Established methods, using animal manure as the only significant input, are well suited to the environment and the favoured potato varieties already appeal to consumers. In fact, the under-development of Inner Mongolia proved an asset, providing one of the least polluted environments in the country for growing the safe and organic produce that sophisticated urbanites have begun to seek out. The only missing link was, indeed, that between farmers and ready markets. Three years after Ms. Wu Qiong's first sale, Wuchuan potatoes gained such a reputation for purity that the Beijing municipal government sought out the cooperative to supply the 2008 Olympic Games.

The SFAGM project has now ended, but the links with Beijing have grown in new directions, reports head researcher Dr. Hu Dinghuan of the Institute of the Chinese Academy of Agricultural Sciences. In a recent turnaround, he says, "Chinese supermarkets have started a new procurement system: they go directly to agri-food product areas and buy directly from farmers or farmer cooperatives. In Wuchan, the supermarket Carrefour buys many potatoes from several potato cooperatives." The French-owned Carrefour is the second largest retail chain in the world in profit terms, but Wuchuan's cooperatives, already organised to sell, have been able to negotiate well with the buyer on their home ground. Their success has proven that, with a little cooperation, even the smallest of smallholders can cut deals with the largest supermarket chains.